STAND. COM. REP. NO. 734

Honolulu, Hawaii

RE: S.B. No. 921

Honorable Ronald D. Kouchi

President of the Senate

Thirty-Second State Legislature

Regular Session of 2023

State of Hawaii

Sir:

Your Committee on Judiciary, to which was referred S.B. No. 921 entitled:

"A BILL FOR AN ACT RELATING TO LIMITATIONS OF ACTIONS,"

begs leave to report as follows:

The purpose and intent of this measure is to clarify that no statute of repose shall affect a condominium association's right of action against a condominium developer sooner than two years after the period of developer control terminates.

Your Committee received testimony in support of this measure from two individuals.

Your Committee finds that a condominium association's right of action against a developer is expressly tolled during the period of developer control pursuant to section 514B-141(c), Hawaii Revised Statutes (HRS). In other words, the two-year statute of limitations period will not begin to run against a condominium association until the developer terminates control, ensuring that a condominium association will not lose its right to sue for design or construction defects if a developer purposefully maintains control for a period longer than two years.

However, your Committee also finds that section 514B-141(c), HRS, does not directly address the effect of the statute of repose contained in section 657-8, HRS, which relates to damages based on construction improvements. Your Committee further finds that this ambiguity could lead courts to interpret section 514B-141(c), HRS, to apply only to the statute of limitations and not to the statute of repose. Your Committee finds that the same rationale for tolling the statute of limitations until developer control terminates exists for the statute of repose. Therefore, this measure clarifies the existing law and preserves the rights of condominium associations to sue.

As affirmed by the record of votes of the members of your Committee on Judiciary that is attached to this report, your Committee is in accord with the intent and purpose of S.B. No. 921 and recommends that it pass Third Reading.

Respectfully submitted on behalf of the members of the Committee on Judiciary,

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KARL RHOADS, Chair